The Israeli housing market faced a challenging start to the year, with a significant decline in new home sales, particularly in Beer-Sheva. According to the Ministry of Finance, only 55% of new home sales were off-plan in January, compared to 67% the previous year. Developers' sales in the free market dropped to 1,668 units, a 13% decrease from January 2024, partly due to increased sales in December 2024 before a tax hike. However, sales under the government 'Target Price' program and second-hand transactions helped balance the situation. Concerns remain about the publication of misleading market data, while developers believe geopolitical tensions could drive prices up. The strong latent demand might materialize if interest rates, currently among the highest globally, decrease.
